When Tax Amnesty Was Totally Cool

The post below was originally published on my previous site on July 18, 2014 . Nine months later, the Indiana General Assembly — at Governor Pence’s urging — passed another tax amnesty to pay for a regional cities economic development program. It’s notable that, once again, not a single person equated tax amnesty with immigration amnesty.

The other day, when I was sitting in a roundtable meeting on immigration policy, a thought came to me that reminded me of the importance of messaging and timing. So travel with me, if you will, back to the year 2005.

2005. Back when I pulled in a cool $28k working for the Indiana Senate and distributed press releases via fax.

2005. Before Twitter, and selfies, and glamping.

2005. Before “amnesty” was a dirty word.

If you’ve been paying attention to the immigration debate — which has really raged for awhile, but has heated up even more recently — anything short of deporting all undocumented immigrants is labeled “amnesty” by opponents. It’s a term that has led to political defeats and shut down numerous attempts to fix America’s obviously failing immigration system. Of all the four-letter words in politics, amnesty, you are the four-letteriest.

What people dislike about amnesty is that a person who breaks the law should not be rewarded or given special treatment.1 And that’s a legitimate debate to have, but it hasn’t always been so controversial.

In 2005, Governor Mitch Daniels introduced Indiana to something called a Tax Amnesty plan. Back then, Indiana had more than $1.3 billion in overdue taxes. People had been skirting the law, and the problem had grown so large, Indiana state government didn’t have the resources to track down all the tax cheats. So Tax Amnesty was introduced to much acclaim and little resistance in the General Assembly.2 People and corporations not up-to-date on taxes had several weeks to pay what they owed “No penalty. No interest. No problem.”

Thanks in large part to an excellent marketing plan, Indiana Tax Amnesty allowed the state to recoup $245 million — about four times more than what the governor had predicted. It was a massive success. But amnesty is such a charged word that I wonder if a similarly named program could even pass today.

There could be lots of reasons why one is popular and the other is heresy. But here are a few reasons why Gov. Daniels’ Tax Amnesty was a success.

First, there was a clearly defined problem. The governor ran on a promise to fix Indiana’s budget crisis. In 2005, there was no more consensus problem than the fact that Indiana was broke. Although most Americans know the border is a problem, I’m not sure they know why.

Second, tax amnesty was temporary. This wasn’t a new way of doing business. It was a one-time fix that had a defined end date.

Third, Tax Amnesty ushered in harsher punishments. In the Tax Amnesty bill, the governor included stiffer penalties and enforcement for people who missed the amnesty window. Could that help sell leery Congressmen on a pathway bill?

The bottom line is that whether it’s 2005 or 2014, words and timing matter. Some messaging that was innocuous ten years ago may be poison today. So craft your message carefully.

1 It should be noted almost nobody is proposing true amnesty — where immigrants become citizens unconditionally — in the immigration debate. The more common proposal now is a process by which people already here can come forward, prove they have a clean criminal record and have paid taxes. They then get to stay in the country without being citizens.